With this recent bout of weakness I thought it would be good to look at some short-term charts of large cap and small cap equities. First up we have the S&P 500 ($SPY) 60-min chart. Since late-October we’ve had multiple touches of the $177.50 level. Hard to not appreciate a clear level of resistance like this.
Next we have the 60-min chart of the Russell 2000 ($IWM). While we had been seeing relative performance strength in small caps in relation to large caps, $IWM has been weakening for the last few weeks. This is illustrated by the falling trend line resistance on the chart below.
Until these levels break to the upside, I’m not overly excited about the equity market at the moment. Seasonality going into the end of the year is strong, but on a short-term basis, things don’t look great right now.
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